Corporate Income Tax (CIT)


The 19-per cent corporate income tax is the only corporate income tax. As a rule, the provisions of EU directives have been implemented into the Polish taxation system.

CIT rate

19 %

Withholding tax:


19 %


20 %

licence fees

20 %

intangible services

20 %

Branch profit tax


Corporate income tax payers include:

  • limited liability companies, joint-stock companies and other legal entities;
  • corporations in formation;
  • limited joint-stock partnerships having its registered office or management board in territory of the Republic of Poland;
  • companies without legal personality having its registered office or management board in another state, if pursuant to the tax laws of another country are treated as legal entities and are subject to taxation in that state on their total income regardless of where it is earned;
  • organisational units without legal personality except for civil partnerships, general partnerships, professional partnerships and limited partnerships.
  • tax capital groups.

Partnerships (excluding limited join-stock partnerships) are not subject to CIT. Income earned by partnerships is allocated to the partners and subject to CIT at their level, together with other earnings.

Taxpayers with offices or management boards in Poland are subject to CIT in Poland on their total income. Taxpayers who do not have offices or management boards in Poland are subject to CIT only on income earned in Poland.

Comparison of taxation on different types of activity (branch/company):




19 %

19 %

Profit distribution

No tax on branch profit distribution.

19% WHT, with the option of an exemption or lower rate.

Rules of taxation

It is important to accurately allocate revenues and costs to the branch's activity, which in practice may cause problems due to the absence of detailed provisions.

The company is a separate taxpayer subject to CIT in accordance with general principles.

Introducing separate accounting



Other comments

Possibility of deducting the CIT paid in Poland in the home country of the holding company. Some treaties provide for an exemption on income taxed in Poland.

Possibility of deducting WHT paid in Poland. In the case of a parent company with its registered office in the European Union, it is typically possible for dividends to be exempt.

The Taxable base is the difference between revenue and the costs incurred in earning it; if the difference is negative, the taxpayer declares a tax loss. In certain cases, revenue may be the taxable base.

Tax Loss

  • may be deducted from income during five subsequent tax years (“loss carry-forward system”); the deduction in a single year cannot exceed 50 per cent of the value of the loss;
  • the following losses are not taken into account: losses of business subject to transformation, merger, acquisition or division – in the event of a transformation of the legal form, a business merger or a division, with the exception of a transformation of a company which is a taxpayer of CIT into another company which will be a taxpayer of CIT.


Profit distribution

Dividends disbursed by corporations with offices in Poland are subject to withholding tax at the 19-per cent rate, (the tax is collected by the company making the disbursement). Dividends disbursed between Polish companies, are not further subject to CIT at the shareholder level.

Tax treaties stipulate a lower withholding rate for dividends (5%, 10% and 15%) if certain conditions are met (inter alia, the company disbursing the dividend should hold the shareholder’s tax residency certificate).

There is possibility of exempting dividends from tax, when entity receiving income (revenue) from dividends, as well as other revenues qualified as dividends, is a company which is subject to taxation on the entire of its income in the Republic of Poland or in a European Union member state other than the Republic of Poland, or the Swiss Confederation or in another state of the European Economic Area, regardless of where it is earned.

The condition of the exemption is continuous, two-year holding period by the company receiving the dividends required 10% (in the case of Swiss – 25%) of shares in the capital of the company paying the charge. The prerequisite is also met, if this period has elapsed after the date of receiving the dividend.

Exemptions and deductions shall apply on condition that legal grounds exist, whether resulting from an agreement for the avoidance of double taxation or a different ratified international treaty to which the Republic of Poland is party, for the tax authority to receive tax information from a tax authority in the state where the registered office of the taxpayer is located or where the income was earned.

An entity interested to make use of this exemption should submit:

  • a current certificate of tax residence or a document of the existence of a foreign permanent establishment, the obligation to submit a current certificate of residence does not apply to companies resident in Polish territory;
  • written statement of not being benefit from exemption from income tax on the entire income, regardless of where it is earned.

The definition of dividend also applies to income earned, among other cases, on a mandatory or automatic redemption of shares or a company liquidation.


Tax on foreign earnings

Income earned by a Polish taxpayer from sources located abroad is subject to 19-per cent CIT and should be cumulated with income earned in Poland, unless the tax treaty states otherwise. The tax paid abroad may be deducted from Polish CIT, but the deduction cannot exceed the amount of CIT due under Polish legislation (for the part classified as foreign income).

Dividends obtained from foreign sources may be exempt from CIT in Poland:

  • if they are disbursed by companies with offices in an EU or EEA state or in Switzerland
  • and the Polish company has held at least 10 per cent (or 25 per cent for companies with their registered office in Switzerland) of the shares in the company disbursing the dividends for at least two years.

The 2 year period may also elapse after the dividend disbursement date.

The company disbursing and the company collecting the dividend must be subject to CIT on their total income in Poland and in the EU/EEA state or in Switzerland. Income on the liquidation of foreign legal entities is not eligible for exemption.

Dividends obtained from companies with offices in a state with which Poland has concluded a tax treaty (other than EU/EEA states or Switzerland) are subject to 19-per cent CIT. However, withholding tax paid abroad and, if other specific conditions are met, foreign CIT paid by a foreign subsidiary, can be deducted from Polish CIT (underlying tax credit). The deduction cannot exceed the CIT amount due under Polish law.


CFC (Controlled Foreign Corporation)

Polish entities are liable to 19% income tax on the profits earned by their controlled foreign companies (CFC).

A CFC is defined as:

  • a foreign company having residence in a tax heaven or
  • a foreign company having residence in a state, with whom the Republic of Poland or European Union has not concluded the international treaty on the exchange of tax information or
  • a foreign company:
    • in which the Polish resident has at least 25% of the shares or 25% of the voting rights or 25% of the shares related to the right to participation in profits;
    • in which at least 50% of income is of the passive nature (financial), ie. dividends, capital gains, interest, royalties;
    • in which at least one type of passive income is subject to tax at a rate lower by 25% than the Polish CIT (which gives a rate of 14.25% limit) or tax exempt (with the exception of exemptions under EU parent-subsidiary directive).

Polish resident is obligated to:

  • maintain a register of controlled foreign corporations;
  • keep records of economic events in CFC;
  • submit CFC tax return and pay a tax on CFC income.

The CFC taxation regime does not apply to entities if they carry out actual economic activity (mainly relates to UE entities) or their annual revenues do not exceed EUR 250 000.


Capital gains

Earnings from the sale of shares and other securities are subject to 19-per cent CIT in accordance with general principles. A tax loss in this respect is accounted for in accordance with general principles and may be used to reduce other earnings subject to CIT).

As a rule (in accordance with tax treaties) - sales of shares/securities by foreign entities are subject to taxation in the country where the seller has its registered office. Exceptions may apply if the sale concerns shares in a company whose assets comprise primarily properties located in Poland- in such a case, the profits may also be subject to taxation in Poland. The so-called “property clause” is found in agreements concluded by Poland with Austria, Belgium, Denmark, Germany and Sweden, Luxembourg among others.

Poland is bound by agreements without a property clause (e.g. agreement with Cyprus, the Netherlands).

As a rule, a sale of shares/securities is subject to a 1-per cent tax on civil law transactions on the market value of the instruments sold, unless it is conducted through a brokerage house. The acquiring party is the taxpayer with respect to the tax on civil law transactions.


Real estate

Earnings from the sale of real estate are subject to 19-per cent CIT in accordance with general principles.


Restructuring efforts

Poland has implemented the directive on a common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States. Mergers, divisions and exchanges of shares concerning companies with seats in the EU may be CIT-neutral, provided that certain requirements are met (a specific degree of capital ties).

Restructuring is often conducted using partnerships or closed-end investment funds, because of its effect of consolidating performance and reducing or eliminating CIT.


Withholding tax

Withholding tax applies to income disbursed in Poland resulting from share in the profits of legal entities, interest, license fees and remuneration for some intangible services.

As a rule, the rate of withholding tax on dividends is 19 per cent, but tax treaties may stipulate a lower rate (5, 10 or 15 per cent).

CIT exemption in Poland are possible: see “Distribution of profits” and “Tax on foreign earnings”: (above).

Interest and license fees are subject to 20-per cent withholding tax in Poland, but tax treaties may stipulate a lower rate (5, 10 or 15 per cent). Some tax treaties also stipulate a 0-per cent rate on interest (e.g. those with Sweden, the United States or France).

Interest and license fees are exempt from withholding tax in Poland if they are disbursed by a corporation with its registered office in Poland to a company with its registered office in an EU/EEA state other than Poland or in Switzerland, and if:

  1. the company disbursing the interest/license fees holds a minimum of 25 per cent of the shares in the capital of the company collecting the interest/licence fees, or
  2. the company collecting the interest/license fees holds a minimum of 25 per cent of the shares in the capital of the company disbursing the interest/licence fees, or
  3. the company subject to taxation on its total income in an EU/EEA state holds at least 25 per cent of the shares in the capital of the disbursing company and in the capital of the company collecting the interest/license fees; and
  4. a minimum 25 per cent share has been held directly and continuously for at least two years - this requirement does not need to be met at the time of the disbursement of the above fees/interest.

The application of exemption is depends on whether the Polish company has the recipient’s tax residency certificate and a statement that the recipient or the company referred to in c) is subject to CIT on its total income in its country of residence, regardless of where the income is earned, and is not taking advantage of an exemption from CIT on its total income regardless of source.

Payments for intangible services, such as advisory services, advertising, data processing, etc. are subject to 20-per cent withholding tax unless otherwise stated by tax treaties (treaties concluded between Poland as a rule do not provide for withholding tax on payments for intangible services).

The 20 per cent withholding tax exemption in Poland is conditional upon the disbursing entity holding the recipient’s tax residency certificate.


Anti-abuse clause

An implementation of the change of EU Directive regarding exemption from taxation of dividends between related companies, i.e. so called anti-abuse clause, is expected to be introduced to the Polish law by the end of 2015. Draft amendments are at the government consultations stage (as of July 2015).

The purpose of directive is to eliminate non-genuine arrangements, usually involving foreign jurisdictions and typically applied by multinationals to avoid paying taxes.

The anti-abuse clause will not exempt dividends and other profit distributions from tax, if:

  • receipt of dividends occurs in connection with the transactions or activities, which are not genuine, meaning that arrangements have been introduced to obtain a tax advantage only;
  • and these transactions have been put into place without reflecting economic reality.


Tax-deductible costs and depreciation

Tax-deductible costs are costs incurred to earn or maintain or secure a source of revenue that are not excluded by statute from the tax-deductible cost category. Taxpayers must document the costs incurred. Tax costs also include expenditures for discontinued investments. The legislation contains a list of more than 60 items that are not regarded as costs for tax purposes. These include, inter alia, accrued but unpaid interest, business entertainment costs (i.e. essentially costs of meeting contractors), administrative penalties and interest on overdue statutory payments, as a rule provisions established in accordance with accounting principles, car wear and tear allowances or car insurance premiums in the portion of the car value that exceeds the equivalent of EUR 20,000. Expenditures for the purchase of fixed assets and intangible assets do not constitute costs either, but depreciation write-downs made in accordance with applicable laws.

As of 2012, an expenditure may not be considered to be a tax cost (including depreciation write-down) if the cost invoice was not settled within deadlines as prescribed by the tax legislation (60 and 90 days), regardless of the payment due date stemming from the contractor agreement. The foregoing limitations are expected to be abolished as of 2016.


As a rule, the tax cost related to interest can be deductible at the time of its payment (cash method) - other than for accounting purposes where the rule is to allocate interest to costs at the time of accrual (accrual method). Exceptions include interest accrued until the date of handover of an asset for use.

Exchange rate differences

may be accounted for at the time they are incurred (tax method) or at the time of their accrual (accounting method). If the accounting method is selected, it applies for at least three tax years. Exceptions include exchange rate differences accrued until the date of handover of an asset for use.



As a rule, depreciation write-downs are based on the cost of acquisition or manufacturing of the depreciated asset. The legislation stipulates the following depreciation methods:

  • linear method (as a rule);
  • Reducing balance depreciation method - means higher costs in the initial depreciation period (applicable to some components: boilers and power generation machinery, basic and specialised machinery, devices and equipment, technical devices, movables and equipment and vehicles other than cars);
  • one-off depreciation (for assets under PLN 3,500);
  • custom rates (applicable to used or improved fixed assets, for example a non-residential building in use for more than five years may be depreciated over forty years minus the full number of years elapsed from the date of its initial handover for use until the date of entering it in the fixed asset and intangible asset register kept by the taxpayer, but the depreciation period cannot be shorter than ten years).

Entrepreneurs who in a given tax year launched economic activity and small taxpayers, can make use of the privilege, which is a one-time depreciation. As part of the relief entrepreneurs can make write-offs up to EUR 50 000 in a given tax year.

For assets depreciated using the linear method, the rate may be decreased in a given tax year by no more than the rate prescribed by tax legislation.

In the case of a transformation, division, merger, in-kind contribution including a business or its organised part, buyers of fixed assets and intangible assets must carry on using the depreciation methods applied by the seller.

Depreciation does not apply to:

  • the land and right of perpetual usufruct of land;
  • expenditure incurred on their acquisition constitute tax deductible cost at the time of non-free of charge disposal (sale).

Depreciation rates and periods for tax purposes may differ from depreciation for accounting purposes.

Examples of depreciation rates and methods for selected assets

Linear method

Reducing balance method

Type of fixed asset

Depreciation period

Annual depreciation rate (%)

Depreciation period

Annual depreciation rate (%)

Car - PLN 50,000

60 months

20% (PLN 10,000)


Truck - PLN 100,000

60 months

20% (PLN 20,000)

30 months

40% (PLN 40,000 in the first year)

Computer - PLN 5,000

3 years

30% (PLN 1,500)

18 months

60% (PLN 3,000 in the first year)

Construction equipment - PLN 1,000,000

60 months

20% (PLN 200,000)

30 months

40% (PLN 400,000 in the first year)

Office building - PLN 10,000,000

40 years

2.5% (PLN 250,000)




Income from leases is subject to 19-per cent CIT in accordance with general principles. Tax laws set out in detail two types of leases: operating leases and financial leases. Leased objects may include fixed assets, intangible assets and land (or the right of perpetual usufruct of land). Lease settlement for tax purposes may be different than for accounting purposes.

For both types of leases, upon contract termination, ownership may be transferred to the beneficiary. Since it is possible to enter the entire lease payment under tax costs, operating leases may be more favourable in terms of tax.

Major differences between operating leases and financial leases:

Operating leases

Financial leases

Lease payments

Lease payments, in their entirety, are a cost for the beneficiary and revenue for the financing party.

Lease payments are a cost for the beneficiary and revenue for the financing party only in the interest portion.


The financing party effects depreciation.

The beneficiary effects depreciation.


At least 40 per cent of the statutory depreciation period (or at least 5 years for real properties).

Fixed term - no minimum or maximum.


Thin capitalisation

As a rule, interest on loans constitutes a tax deductible cost at the time of payment. However, interest on loans extended to the company by certain related parties is not a tax cost if the following requirements are met (thin capitalization rules):

  • a loan is granted by: entity holding directly or indirectly at least 25 per cent of the shares in the company receiving the loans or
  • a loan is granted jointly by entities holding directly or indirectly at least 25 per cent of the shares in the company or
  • a loan is granted by another company, and in both companies the same entity directly or indirectly holds not less than 25% of the shares and
  • the amount of the company’s total debt (loan and other liabilities) toward related parties exceeds equity of the company, in proportion in which debt exceeding equity remains to the total amount of debt.

    The value of non-deductible interest is determined by the proportion of:

company’s debt - equity


company’s debt


Share in the capital is determined on the basis of votes held.

The value of debt and equity is calculated on the last day of the month preceding the payment of interest.

Polish law provides for a broad definition of loan for the purpose of thin capitalization, a loan is also understood as, among others, bonds and deposits.

As a rule, loan agreements are subject to 2-per cent tax on civil law transactions.

Examples of civil law transaction tax exemptions for loans

  • loans extended to a corporation by its (shareholders);
  • loans extended by foreign companies conducting lending activity;
  • loans that are eligible for VAT exemptions (as financial intermediation services).


Tax capital groups (PGK)

It is possible to consolidate results for tax purposes within a PGK. However, due to the stringent requirements of the applicable laws, capital groups are not a popular means of consolidation for tax purposes in Poland.

Some of the requirements for establishing a capital group are as follows:

  • having a registered office (for companies that belong to a group in Poland);
  • average capital of each group company of PLN 1,000,000 (approximately EUR 250,000; assuming that 1 EUR = 4 PLN);
  • minimum share in subsidiaries by the parent company - 95 per cent;
  • group companies do not take advantage of income tax exemptions under other acts (the use of an exemption due to activity conducted within a SEZ - does not preclude from establishing a PGK);
  • minimum share of income in the revenue of the tax group - 3 per cent;
  • specific requirements regarding the form and wording of the agreement;
  • minimum term of the agreement - 3 years;
  • no option to expand the agreement to include other companies (and other restrictions).


Conducting business via partnerships (excluding joint stock limited partnership) may be an alternative to tax capital groups. Income earned by partnerships is allocated to the partners and subject to CIT at the partner level, together with their other earnings. There are no additional administrative requirements such as those applicable to tax capital groups.


Tax exemptions and credits

Legislation provides for a number of CIT exemptions, both subjective and objective. For instance, investment funds, pension funds, public service organisations, church organisations and special economic zone companies are exempt from tax upon meeting appropriate requirements. Furthermore, CIT does not apply to agricultural business, with the exception of income from special departments of agricultural production.


The income of Polish investment funds is exempt from CIT. The same applies to funds investing in real estate. Moreover, foreign investment funds may also be exempt from CIT if they meet the requirements set forth in the CIT Act.

Special Economic Zones (SEZs)

SEZs will apply in Poland until the end of 2026.

Companies operating in SEZs may typically be exempt from CIT. The rate of exemption depends on the region/province, and currently ranges from 30 per cent to 50 per cent of:

  • investment costs incurred during the completion of an investment in the SEZ, or

  • the sum of two-year employment costs for newly-created jobs.

A CIT exemption is available if the taxpayer:

  • obtains a business permit for activity in the SEZ;
  • incurs eligible expenses after the date of obtaining the permit;
  • incurs eligible expenses for a new investment;
  • shall not transfer the ownership of the assets subject to capital expenditures during three or five years (depending on whether the taxpayer is a large, medium-sized or small enterprise) from the date of entry in the register of fixed assets and intangible assets;
  • will conduct business for no less than three or five years (depending on whether the taxpayer is a large, medium-sized or small enterprise).

As a rule, SEZ business permits are issued for manufacturing activity. However, in most SEZs, it is also possible to provide the following services: accounting, other than tax returns, bookkeeping, call centres, IT services, technical surveys and analyses, research services.

The exemption applies solely to the company’s activity within the SEZ.

Companies operating in SEZs may also take advantage of property tax exemptions.

Returns/filing requirements

As a rule, the tax year covers twelve consecutive months, but in the course of business, taxpayers may modify the tax year pattern adopted.

Returns/CIT withholdings

No requirement to file returns. CIT withholdings must be paid by the 20th of every month.

Annual tax return CIT-8 is filed by the end of the third month after the end of each tax year. The CIT set forth in the annual return must also be paid by the above deadline.

From 2015 onward submission of the tax return CIT-8 in a different way than electronically will be invalid.



Last update: July 2015

Prepared for the Polish Information and Foreign Investment Agency by:

MDDP - Tax Advice Company

Bookmark with:    
Polish Information and Foreign Investment Agency
ul. Bagatela 12; 00-585 Warsaw;
Fax: +48 22 334 9889

e-mail for investors:

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Taxpayer's Identification Number (NIP) PL 526-030-01-67;

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